CyberConnect2 CEO Hiroshi Matsuyama recently shared a video on his social media addressing how the video game industry, particularly his company, will navigate the ongoing decline of physical game discs. The video is part of a series, primarily posted on TikTok, where he responds to queries from new employees about the gaming sector.
Following Sony’s announcement that it will cease physical releases for the PlayStation starting in 2028, and as Blu-ray manufacturers in Japan begin to withdraw from the market, many gamers are pondering the broader implications of this shift—especially concerning issues like media preservation and the concept of “ownership” for digital content.
In the video, however, Matsuyama contends that a complete transition to digital game distribution would be “nothing but a positive development” from a developer’s standpoint.
Initially, he highlights the disparity in profits between physical and digital releases. He explains that physical copies often rely on a low-margin, high-volume approach to remain profitable. Since developers like CyberConnect2 must purchase discs and cards directly from Sony and Nintendo to produce physical games for their consoles, moving entirely digital would eliminate these costs entirely.
“While physical copies were once a cultural norm, I understand why some may lament their disappearance. However, they no longer compete in terms of convenience,” Matsuyama remarks. Citing recent examples from Capcom and Square Enix, he notes that over 90% of current game sales stem from digital downloads, with physical copies accounting for less than 10%. In this context, Matsuyama suggests that maintaining production for such a small fraction of sales is impractical.
“Developers rely on their salaries, and maximizing profits and sales is a professional necessity. If you insist on releasing physical games even at the cost of reduced salaries, I can accommodate that—but I doubt anyone would agree to that,” Matsuyama states.
While Matsuyama acknowledges that catering to a small segment of collectors and enthusiasts is unsustainable long-term, he doesn’t foresee physical “packages” vanishing abruptly. Boxes containing download codes and additional merchandise will likely persist to cater to collectors and dedicated fans, he suggests. Discs, however, are “doomed to fail.”
Matsuyama specifically points out that modern games are too large for physical discs. “Games now often exceed 160GB or 200GB in size. GTA 6 is too large for a physical disc, and Blu-ray discs max out at 80GB—how many discs would you need? Delivering such an inconvenient experience isn’t ideal. The Switch cart’s maximum capacity alone shows that games are too big. That’s why digital releases are becoming the norm,” he argues.
Matsuyama admits that while many will be saddened by the decline of physical media—and he himself feels the same—he believes that the entertainment industry must demonstrate the future to its audience.
“I believe this transition is crucial. The impact will be entirely positive, profitability will rise more quickly, and developers will receive greater bonuses.”